Legal Definitions - original market

The term original market is synonymous with the primary market. It refers to the initial point of sale for a product, service, or financial asset. In an original market, an item is sold for the very first time directly from its creator, issuer, or manufacturer to the first buyer. This market is distinct from a "secondary market," where items are resold between buyers and sellers after their initial purchase. In an original market, the proceeds from the sale typically go to the entity that created or issued the item.

Here are some examples illustrating the concept of an original market:

• Example 1: Financial Securities

  When a government issues new bonds to fund public projects, and institutional investors or individuals purchase these bonds directly from the government or its designated agents, they are participating in the original market. The funds from these sales go directly to the government to finance its initiatives.

  This illustrates the original market because the bonds are being sold for the very first time by their issuer (the government) to the initial buyers.

• Example 2: Consumer Products

  A major automobile manufacturer unveils a completely new model of electric vehicle. When customers visit a dealership and purchase one of these brand-new cars directly from the manufacturer's authorized dealer, they are buying in the original market. The revenue from these sales goes back to the manufacturer and its distribution network.

  This demonstrates the original market as the cars are being sold directly from the manufacturer (via its dealers) to the first owners, rather than being resold used vehicles.

• Example 3: Creative Works

  A new independent film studio completes its first feature film and releases it directly to streaming platforms for a one-time purchase or rental. When viewers pay to watch this film for the first time through these platforms, they are engaging in the original market for that digital content. The revenue generated from these initial viewings goes to the film studio and its distributors.

  This shows an original market because the film is being offered for its initial consumption directly by its creator (the studio) to the audience, before it might be licensed to other services or resold in different formats.